South East Water - Further Re Restructuring, etc
12 Januar 1999 - 4:00PM
UK Regulatory
RNS No 472f
SOUTH EAST WATER PLC
12th January 1999
SOUTH EAST WATER PLC
(formerly Mid-Sussex Water plc)
("South East" or "the Company")
Introduction
On 9 November 1998 SAUR Water Services announced its intention to restructure
its subsidiary water operating companies.
On 4 January 1999, the Company changed its name from "Mid-Sussex Water plc" to
"South East Water plc".
The restructuring is now nearing completion and today the Company announces
the details of how the restructuring affects holders of debenture stocks in
Mid Southern, Eastbourne, South East and West Kent.
South East was appointed by the Director General of Water Services as water
undertaker for the areas previously served by Mid-Sussex and Mid Southern with
effect from 1 January 1999. On being appointed, the Company acquired all of
the property, rights and liabilities of each of Eastbourne, Mid Southern,
Mid-Sussex and West Kent pursuant to transfer schemes in accordance with
Schedule 2 to the Water Industry Act 1991. The listed debenture stocks of
Eastbourne, Mid Southern and West Kent were included in these transfers.
None of the terms of the Transferred Debenture Stocks were changed as a result
of their transfer to South East. They will all remain listed on the London
Stock Exchange, and will be listed under South East. South East already has
its own debenture stocks in issue, which are listed on the London Stock
Exchange.
Application has been made to the London Stock Exchange for the admission of
the Transferred Debenture Stocks to the Official List of the London Stock
Exchange. Dealings are expected to commence in the Transferred Debenture
Stocks on 14th January 1999. Copies of Listing Particulars and a Circular
relating to the restructuring are being posted today to holders of the
Transferred Debenture Stocks.
As part of the restructuring, Mid-Sussex acquired the outstanding share
capital of Eastbourne, Mid Southern, West Kent and South East pursuant to
separate schemes of arrangement under section 425 of the Companies Act 1985.
These schemes of arrangement became effective on 15 December 1998, and as a
result, all four companies are now wholly owned subsidiaries of SAUR Water
Services.
To complete the restructuring, the shareholding in South East held by
Mid-Sussex will be transferred to SAUR Water Services and, subsequently, the
shareholding in Mid-Sussex held by SAUR Water Services will be transferred to
South East. The shareholders' funds of South East will then be increased by
dividends being declared and paid by Mid-Sussex to South East.
The restructuring of the operations of the companies has been implemented in
order to achieve administrative and other cost savings, and to deliver price
reductions to customers.
Listing
Admission to the Official List of the London Stock Exchange has been sought
for #6,071,201 in principal amount of the Transferred Debenture Stocks.
The Transferred Debenture Stocks comprise the following debenture stocks:
(i) Eight classes of perpetual debenture stocks made up as to:
* #5,000 of 4 per cent. Perpetual Debenture Stock of Eastbourne;
* #320,476 of 3.5 per cent. Perpetual Debenture Stock of Mid Southern,
#47,155 of 4 per cent. Perpetual Debenture Stock of Mid Southern,
#179,939 of 5 per cent. Perpetual Debenture Stock of Mid Southern,
#3,525 of 5.5 per cent. Perpetual Debenture Stock of Mid Southern and
#61,556 of 6 per cent. Perpetual Debenture Stock of Mid Southern; and
* #40,000 of 3.5 per cent. Perpetual Debenture Stock of West Kent and
#13,050 of 4 per cent. Perpetual Debenture Stock of West Kent;
(ii) Two classes of redeemable debenture stocks made up as to #3,800,000 of
12.5 per cent. Redeemable Debenture Stock 2004 of Eastbourne and
#1,600,000 of 11.2 per cent. Redeemable Debenture Stock 2005/9 of
Eastbourne.
None of the Transferred Debenture Stocks will be sold or will be available in
whole or in part to the public in connection with the application for listing
and, as there will be no issue of debenture stocks, none of the stocks will be
underwritten or guaranteed. No temporary documents of title will be issued
and definitive certificates for the Transferred Debenture Stocks in the new
name of South East Water plc will be available from the Company Secretary upon
the surrender of existing certificates from Eastbourne, Mid Southern and West
Kent.
Existing certificates will, however, continue to remain valid until surrender.
The Transferred Debenture Stocks are in registered form and are not capable
of being held in uncertificated form.
Particulars of the Transferred Debenture Stocks
The Transferred Debenture Stocks were transferred pursuant to the Transfer
Schemes and their terms of issue will remain unchanged. The terms are as
follows:-
(a) The Transferred Debenture Stocks of Mid Southern
All the debenture stocks were created and issued pursuant to the powers of
Mid Southern to create and issue debenture stocks contained in the Mid
Southern Acts and Orders 1893 to 1987.
All the debenture stocks are and will remain irredeemable.
Interest on all the debenture stocks of Mid Southern is and will remain
payable half-yearly on 30 June and 31 December each year.
The debenture stockholders have all the rights conferred by the Companies
Clauses Act 1863 and the Companies Clauses Consolidation Act 1888. This
includes the right to apply to the Court to appoint a receiver. A
receiver appointed by the Court will have the power to ensure that monies
received by the Company are applied for the benefit of the debenture
stockholder.
The competent courts in the event of litigation are and will remain the
Courts of England.
(b) The Transferred Debenture Stocks of Eastbourne
The #3,800,000 of 12.5 per cent. Redeemable Debenture Stock 2004 was
created under the authority of the Eastbourne Waterworks Acts and Orders,
1859 to 1983, and the issue authorised by resolution of the directors
dated 2 September 1983. The stock is an investment authorised by Section
1 of the Trustee Investment Act, 1961 and by paragraph 10 (as amended in
its application to Eastbourne) of Part II of the First Schedule thereto.
The stock is redeemable at par on 31 December 2004 out of the Company's
financial resources.
The #1,600,000 of 11.2 per cent. Redeemable Debenture Stock 2005/9 was
created by and issued under a resolution of the directors dated 2 October
1985 pursuant to the powers contained in the Eastbourne Water (Financial
Provisions) Order 1983. It is also an investment authorised under Section
1 of the Trustee Investments Act 1961 and by paragraph 10 (as amended in
its application to Eastbourne) of Part II of the First Schedule thereto.
The Stock is redeemable at par on 31 December 2009 out of the Company's
financial resources, or at the option of the Company on 31 December 2005
or at any time thereafter on the Company giving holders three months
notice in writing before the final date of redemption.
The #5,000 of 4 per cent. Perpetual Debenture Stock was created and
issued pursuant to the power of Eastbourne to create and issue debenture
stocks contained in the Eastbourne Waterworks Acts and Orders 1859 to
1983.
Interest on all the debenture stocks of Eastbourne is and will remain
payable half-yearly on 30 June and 31 December each year.
The debenture stockholders have all the rights conferred by the Companies
Clauses Act 1863, and the Companies Clauses Consolidation Act 1888. This
includes the right to apply to the Court to appoint a receiver. A
receiver appointed by the Court will have the power to ensure that monies
received by the Company are applied for the benefit of the debenture
stockholder.
The competent courts in the event of litigation are and will remain the
Courts of England.
(c) The Transferred Debenture Stocks of West Kent
All the debenture stocks were created and issued pursuant to the power of
West Kent to create and issue debenture stocks contained in the West Kent
Water Acts and Orders 1878 to 1986.
All the debenture stocks are and will remain irredeemable.
Interest on all the debenture stocks of West Kent is and will remain
payable half yearly on 30 June and 31 December of each year.
The debenture stockholders have all the rights conferred by the Companies
Clauses Act 1863 and the Companies Clauses Consolidation Act 1888. This
includes the right to apply to the Court to appoint a receiver. A
receiver appointed by the Court will have the power to ensure that monies
received by the Company are applied for the benefit of the debenture
stockholder.
The competent courts in the event of litigation are and will remain the
Courts of England.
Financial Implications for Holders of Transferred Debenture Stocks and the
South East Debenture Stocks
Although the interest and net asset covers of Mid Southern and West Kent are
reduced by the restructuring, the directors of South East believe that the
resulting interest and net asset covers are adequate. In the case of the
existing South East and Eastbourne debenture stocks, interest and net asset
covers are increased as a result of the restructuring.
None of the terms of the Transferred Debenture Stocks will be changed as a
result of their transfer to South East.
The Directors of South East have been advised that the transfer of the
Transferred Debenture Stocks to the Company in accordance with the Transfer
Schemes should not constitute a disposal for taxation purposes by the
debenture stockholders.
Holders of the Transferred Debenture Stocks who are in any doubt as to their
taxation position, or who are subject to taxation in any jurisdiction other
than the UK, are strongly advised to seek their own tax advice from an
appropriate independent professional adviser without delay.
Future Prospects
In October 1998 the Director General of Water Services published a
consultation document preceding the Periodic Review setting out his views on
prices to be charged by all water companies from 1 April 2000. The Directors
are considering the impact of the draft proposals on South East and their
response to the Director General.
The result of the restructuring is an enlarged company under the name of South
East, holding an Instrument of Appointment to supply water to a population of
approximately 1.4 million in the South East of England. Prior to the
restructuring the companies had been operating with a high degree of
co-operation under a single management since early 1997. This enabled an
improved level of customer service to be provided and a higher level of
security of water resources. Customers have also benefited through lower
charges than would have been levied if the companies had remained independent.
South East intends to continue to maintain these high standards of customer
service. The terms and conditions of employees have not been directly
affected by the restructuring.
Enquiries:
South East Water plc
Willi Robertson Tel: 01323 411 411
John East & Partners
David Worlidge Tel: 0171 628 2200
John Stanley
European Capital Company Limited
Stephen Smith Tel: 0171 600 3138
DEFINITIONS
Unless the context otherwise requires, throughout this document the following
definitions apply:-
"Company" or "South East" - South East Water plc (formerly Mid-Sussex Water
plc), a subsidiary of Mid-Sussex as at the date of this document, but which
will, following the reorganisation, become the parent company of Mid-Sussex
"Directors" - the directors of the Company
"Eastbourne" - Eastbourne Water plc, a subsidiary of Mid-Sussex
"Enlarged Group" - the Company and its subsidiaries following completion of
the Transfer Schemes
"European Capital" - European Capital Company Limited
"John East & Partners" - John East & Partners Limited
"London Stock Exchange" - London Stock Exchange Limited
"Mid Southern" - Mid Southern Water plc, a subsidiary of Mid-Sussex
"SAUR Water Services" - SAUR Water Services plc, a wholly owned subsidiary of
SAUR UK Limited
"Mid-Sussex" - Mid-Sussex Water Limited (formerly South East Water Limited), a
subsidiary of SAUR Water Services
"Transferred Debenture Stocks" - the Transferred Debenture Stocks of
Eastbourne, the Transferred Debenture Stocks of Mid Southern and the
Transferred Debenture Stocks of West Kent
"Transferred Debenture Stocks of Eastbourne" - the #5,000 of 4 per cent.
Perpetual Debenture Stock, the #3,800,000 of 12.5 per cent. Redeemable
Debenture Stock 2004 and the #1,600,000 of 11.2 per cent. Redeemable Debenture
Stock 2005/9 which have been transferred to the Company pursuant to the
Transfer Schemes
"Transferred Debenture Stocks of Mid Southern" - the #320,476 of 3.5 per cent.
Perpetual Debenture Stock, the #47,155 of 4 per cent. Perpetual Debenture
Stock, the #179,939 of 5 per cent. Perpetual Debenture Stock, the #3,525 of
5.5 per cent. Perpetual Debenture Stock and the #61,556 of 6 per cent.
Perpetual Debenture Stock which have been transferred to the Company pursuant
to the Transfer Schemes
"Transferred Debenture Stocks of West Kent" - the #40,000 of 3.5 per cent.
Perpetual Debenture Stock and the #13,050 of 4 per cent. Perpetual Debenture
Stock which have been transferred to the Company pursuant to the Transfer
Schemes
"Transfer Schemes" - the schemes for the transfer of the property, rights and
liabilities, including debenture stocks, of Eastbourne, Mid Southern,
Mid-Sussex and West Kent to the Company in accordance with Schedule 2 to the
Water Industry Act 1991 which became effective on 1 January 1999
"West Kent" - West Kent Water plc, a subsidiary of Mid-Sussex
END
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